Additional Details on BIS Wassenaar Final Rule Changes (Categories 1-4)

September 8, 2010 by Cindy Arevalo|Exports, OFAC and DoD

The Bureau of Industry and Security has issued a final rule, effective September 7, 2010, to revise the Export Administration Regulations to implement most of the changes made to the Wassenaar Arrangement's List of Dual Use Goods and Technologies maintained and agreed to by governments participating in the Wassenaar Arrangement’s December 2009 Plenary Meeting.

(The Wassenaar Arrangement advocates implementation of effective export controls on strategic items with the objective of improving regional and international security and stability.)

To harmonize with the changes made to the Wassenaar List at the Plenary, BIS’ final rule revises the EAR by amending certain entries that are controlled for national security reasons in Categories 1, 2, 3, 4, 5 Part I (telecommunications), 6, 7, and 9; revising reporting requirements; and adding, removing and amending EAR definitions.

This is Part I of a multi-part series of summaries of the changes made by BIS’ Wassenaar final rule. See future issues for summaries of the remaining changes. (See ITT’s Online Archives or 09/07/10 news, 10090708, for BP summary announcing the publication of BIS’ final rule.)

Category 1 - Special Materials, Chemicals, Microorganisms, Toxins

ECCN 1A001 is amended by adding a Chemical Abstracts Service (CAS) number and the phrase “having all of the following” to paragraph b to clarify the text.

ECCN 1A002 is amended by: Revising Note 1 at the beginning of the Items paragraph to change the size of composite structures or laminates used for the repair of “civil aircraft,” to address the increasing usage of carbon materials in commercial aircraft. The current size limit set forth in this ECCN limits the ability of airlines to repair aircraft successfully and in a timely manner because of the time needed to obtain an export license for sizes other than those allowed without license under Note 1 of this ECCN.

ECCN 1B001 is amended by:

Revising the heading to more precisely describe what is in the entry, by adding the phrases “or inspection”, “structures or laminates”, and “fibrous or filamentary materials” specified by”; and removing the phrase “fibers, prepregs, performs or”.
Revising the Missile Technology (MT) control paragraph in the License Requirements section by replacing the phrase “entire entry except 1B001.d.4 and .f “ with the phrase “entire entry, except 1B001.d.4, e and f “ and removing the Note that follows the MT control paragraph.
In 1B001.a, adding a comma after “filament winding machines” and adding the term “primary servo positioning” before axes, which is defined in the technical note of the newly added paragraph 1B001.g.
In 1B001.b, moving “tow placement machines” to 1B001.g to remove machines capable of more complex airframe and missile structures from this paragraph; moving a comma to correct the punctuation; replacing the phrase “two * * * axes” with “five * * * axes’’ to focus the control on those capable of manufacturing complex “composite” airframe or missile structures; and adding the term ‘primary servo positioning’ before axes to indicate which axes this control pertains to.
Adding a new paragraph 1B001.g for tow placement machines previously specified by 1B001.b, to establish a separate paragraph for machines capable of more complex airframe and missile structures. This new paragraph is subject to MT controls, as well as National Security (NS) and Anti-Terrorism (AT) controls.
Adding a new technical note to define ‘primary servo positioning’ throughout 1B001.

ECCN 1C002 is amended by adding the phrase “the powder or particulate”before “material controlled by 1C002.c” in 1C002.b in order to clarify which type of materials are controlled.

ECCNs 1C006, 1C007, 1C008, 1C011, 1E002, and Category 1 Annex are amended by adding CAS numbers to certain paragraphs for clarity.

ECCN 1C010 is amended by:

Deleting part of the Heading to remove the text beginning with the phrase “which can be used in organic * * *.” This text is ambiguous and did not contribute to the original intent of the control, and could be interpreted to limit the scope of the control.
Making editorial changes to 1C010.a.1 and a.2, b.1 and b.2, c.1 and c.2 to remove words that do not add substance or clarity to the control text in these paragraphs.
Revising the control parameters in 1C010.b.1 “specific modulus” and b.2 “specific tensile strength” for carbon “fibrous or filamentary materials” because of foreign availability outside of Wassenaar member countries and to recognize industry improvements to the processing of these materials.
Revising size of the structures or laminate in the Note to 1C010.b for repair of civil aircraft because a high percentage of the damages to civil aircraft have long, thin, and shallow characteristics caused by ground equipment. Revising the size of these structures or laminate makes them more accessible for the repair of civil aircraft, from an export licensing perspective.
Adding a new paragraph b to the note to 1C010.b to decontrol certain short carbon fibers that are the product of chopping, milling or cutting, because material properties of 1C010 carbon fibers shorter than 25.0 mm are significantly reduced.
Revising 1C010.e to have a more consistent format, to treat phenolic resins separately from other resins, and to add a note to direct the public to the correct control text for performs that are not impregnated (i.e., dry).
Revising the technical note describing “glass transition temperature” to read “Dynamic Mechanical Analysis glass transition temperature (DMA Tg),” to reflect the new term as used in 1C010.e. This rule also implements a new measurement standard ASTM D 7028 in this technical note, which measures the DMA Tg on a cured laminate with clear data interpretation instructions, to reduce errors and inconsistencies associated with measuring resin DMA Tg.

Category 2 - Materials Processing

ECCN 2B006 is amended by adding capitalization for correct format and adding a technical note to indicate the required configuration of Coordinate Measuring Machines (CMM) when calculating the maximum permissible error of indication parameter.

Category 3 - Electronics

ECCN 3A001 is amended by:

Adding a hyphen in the word “space qualified” in paragraphs 3A001.b.1.a.4.c and e.4, to correct the format of the term.
Removing the word “density” after output power in paragraph 3A001.b.8.b in order to remove a word that the Wassenaar Arrangement never intended to include in this paragraph.
Adding 3A001.b.11 to control items moved to ECCN 3A001 from 3A002.b. This move makes it clear that the “electronic assemblies” controlled by this entry are components, and not instruments, which is how the assemblies were characterized incorrectly in 3A002.b.

ECCN 3A002 is amended by:

Revising the License Exception section to remove references to 3A002.b to harmonize with the movement of 3A002.b to 3A001.b11.
Adding a hyphen in the word “space qualified” in paragraph 3A002.a.3.b, g.1 and g.3, to correct the format of the term.
Removing and reserving 3A002.b and incorporating the “frequency synthesizer” "electronic assemblies”’ controlled by that entry into new paragraph 3A001.b.11. This move makes it clear that these “‘frequency synthesizer” "electronic assemblies” are components and not instruments, which is how the assemblies were characterized incorrectly in 3A002.b.
Revising the parameters in paragraph 3A002.e to relax the controls on network analyzers to more accurately differentiate between commercial or civilian applications and applications of strategic concern.

ECCN 3B001 is amended by:

Revising the control parameters for anisotropic plasma dry etching equipment in 3B001.c to clearly apply the control parameter to device nodes of 65 nm or below in order to make the control of this equipment consistent with current integrated circuit production sizes, to maintain control on more advanced equipment in this ECCN, and to remove controls on older equipment and spare parts that are no longer of proliferation concern.
Revising the control parameter for automatic loading multi-chamber Central Wafer Handling (CWH) systems in 3B001.e to relax controls on two classes of CWH systems that have been found to be of less proliferation concern and to place the focus on more advanced CWH.
Adding technical notes for 3B001.e to provide definitions of two terms used in the control text in order to remove ambiguity in the control.

Category 4 - Computers

ECCN 4A001 is amended by:

Removing a reference to 4A001.b from the Limited Value Shipment (LVS) paragraph of the License Exception section, because paragraph 4A001.b is removed by this rule.
Adding a reference to Category 5 Part 2 to the Related Controls paragraph in the List of Items Controlled section, to correspond with the removal of 4A001.b, described below.
Removing and reserving 4A001.b, which stated “‘Having the characteristics or performing functions exceeding the limits in Category 5, Part 2 (‘‘Information Security”)”, because such hardware and software is controlled under 5A002 and 5D002 in Category 5, Part 2. This change clarifies where this equipment and software is controlled in the CCL.

ECCN 4A003 is amended by revising the control parameters for equipment specially designed for aggregating the performance of “digital computers” in 4A003.g to move the control threshold up, to account for bi-directional connectivity at double the threshold, as well as to narrow the scope of control to ensure that only the equipment of concern is controlled.

Category 4 - Product Group D - Software

Revising the Note at the beginning to remove the sentence, “The control status of ‘software’ for equipment described in this Category is dealt with herein,” because most software for computers contains encryption, which is controlled in Category 5.

ECCNs 4D001 and 4E001 are amended by increasing the Adjusted Peak Performance APP from 0.1 to 0.25 WT in 4D001.b.1 and 4E001.b.1 to account for technological advancements in processor technology and to set an APP that will remain relevant for several years.

ECCN 4D003, “Software having characteristics or performing functions exceeding the limits in Category 5, Part 2 (Information Security),” is removed in order to keep all such software controls in Category 5 part 2.

ECCN 4D993 is amended by revising the Heading in order to remove the reference to ECCN 4D003, which is removed by this rule.

Savings Clause

Shipments of items removed from license exception eligibility or eligibility for export without a license as a result of this regulatory action that were on dock for loading, on lighter, laden aboard an exporting carrier, or en route aboard a carrier to a port of export, on September 7, 2010, pursuant to actual orders for export to a foreign destination, may proceed to that destination under the previous license exception eligibility or without a license so long as they have been exported from the U.S. before November 8, 2010. Any such items not actually exported before midnight, on November 8, 2010 require a license in accordance with this regulation.

(BIS final rule, D/N 100413184-0299-01, FR Pub 09/07/10)